I’m a native of Mexico who lives and works in Washington D.C. as a Foreign Correspondent. From 1989 to 2005, I was bureau chief for El Financiero, Mexico’s leading financial newspaper. I am currently Washington correspondent for Noticias MVS, Mexico’s #1 radio news station. My book, U.S. Ambassadors to Mexico, published by the Woodrow Wilson Center, looks into three decades of U.S.-Mexico relations from the unique perspective of Washington’s men in Mexico. The book is also available in Spanish under the title El Embajador (Editorial Planeta, 2013). Follow me on Twitter: @DoliaEstevez or write me: mexicobillionaire@gmail.com

Mexico Is The Fifth Most Dangerous Country In Latin America For Business Says FTI Consulting

Despite efforts by the government of President Enrique Peña Nieto to reduce the alarming levels of violence that Mexico has become known for, there are no signs of significant improvement. According to FTI Consulting, Inc. (NYSE:FCN), a Palm Beach-based global businesssecurity assessment firm, Mexico is one of the five most dangerous countries for companies and executives who conduct business in Latin America. After Venezuela, Honduras, Guatemala and Haiti, Mexico ranks fifth in FTI’s 2014 Latin American Security Index, published this week.

“After some initial success in lowering homicide rates,” writes Frank L. Holder, Chairman of Latin America for FTI ConsultingFTI Consulting and author of the Latin America Security Index, “the overall security situation in Mexico shows little sign of further improvement. The growth of militias to fight the drug cartels, infighting among the cartels

Enrique Peña Nieto, (Photo credit: Wikipedia)

themselves and continued government actions has shown a similar level of public insecurity, kidnappings and violence as prior years, with increases in some areas such as theft of merchandise in transit.”

The latest data from Mexico’s Ministry of Government (Gobernación) supports FTI’s assessment. Between January and February of this year, the National System on Public Security (SNSP), the ministry’s agency in charge of translating violence into numbers, reports 330 kidnappings and 1,305 extortion cases nationwide, an 11% and 4.5% increase, respectively, in relation to the same period in 2013. The State of Mexico, Peña Nieto’s home state (which is one step away from Mexico City), has the highest number of homicides and extortions, while Tamaulipas, bordering the state of Texas, registers the highest level of kidnappings.

Though Mexico City, the nation’s capital, has not witnessed the levels of violence of other regions, Holder said security is deteriorating there also. ”During the past 15 months there has been an increase in homicides linked to organized crime, as well as some increase in common criminality such as home invasions, armed robbery and theft of merchandise in transit,” Holder told me by e-mail. He said that the most serious threats to businessmen in the states of Tamaulipas, Guerrero, Michoacán and Mexico are extortion, kidnapping and violence related to organized crime, even though they can also be the victims of ordinary crime in metropolitan areas such as Mexico City, Guadalajara and Monterrey.

The Mexican government insists that the homicide rate has diminished by 20% in relation to 2013, but the data that it offers to back up the assertion is confusing to say the least. Security expert Alejandro Hope, in a recent article, said that homicides with firearms, i.e. those related to organized crime, have not gone down in the past year. In January 2013, there was an average of 26.1 homicides per day, exactly the same rate recorded in February of this year.

As for the positive impact that the “spectacular capture” of drug lord Joaquín El Chapo Guzmán, leader of the powerful Sinaloa cartel, may have in the overall security situation in Mexico, the FTI report says it is too early to tell.

The FTI index does not address the issue of corruption, but Juan Pablo Castañón, president of Copermex, Mexico’s leading business organization, said this week that corruption represents the main criminal burden for business in Mexico. According to Castañón, corruption exceeds the costs of stolen merchandise and extortion.

The FTI rating highlights the fact that drug-related organized crime and extreme violence, and the movement of drugs from production to consumer markets, continues to be a major source of public insecurity in parts of Central America and Mexico. Therefore, the reports says, the insecurity continues to demand significant resources from the business community to protect its assets and has a corrosive effect on the region’s competitiveness in the fight to attract investment.

The Index notes that social and political unrest has become a factor for some of the more troubled Latin American economies, such as Venezuela. It also observes that despite significant investment which has led to improvements in some countries such as Colombia and Brazil, those countries have seen a resurgence of crime that has been difficult to control. According to the Index, Costa Rica, Chile and Uruguay remain the safest countries in the region.

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Interesting article. While security issues in many parts of Michoacan and Guerrero remain extremely tense and complex, I think it might be a bit to extreme to extend the same sort of warning to Mexico City. What is the definition of a “businessman”?—- a local business owner? An executive at a major company who lives in neighborhoods such as Polanco or Condesa? I think the risk profile depends greatly on the person and the neighborhoods he / she visits. In any case, it will be important to watch how the dynamic changes over the rest of the year.

﻿The State Department’s latest Travel Warning on Mexico (January), left out Mexico City for now. The Mexican government strongly objected to the idea of including Mexico City in the warning. The warning does say that areas within the greater Mexico City metropolitan area, i.e. the state of Mexico, are off limits for American travelers. If the security situation continues to deteriorate (there has been jumps in the rate of extortion and kidnapping) I would not be surprise if the DOS decides to include Mexico City despite Mexican objections.